Bank of America will invest up to US$1.92 billion (A$2.715 billion) for a 49.9% stake in Jio Credit, the non-bank lending arm of Jio Financial Services, the companies said on Wednesday.
The United States lender will become a joint venture partner through a preferential allotment of equity shares and warrants.
The transaction will initially give Bank of America a 26.5% stake in Jio Credit, which could rise to 49.9% if the warrants are exercised.
The deal is the latest major investment in India’s financial services sector, following Japan’s investment in Shriram Finance and Dubai-based Emirates NBD’s acquisition of a 60% stake in RBL Bank.
"The venture will combine J F S LJFSL’s digital reach and knowledge of the Indian market with B of ABofA’s global financial services expertise.
"Both companies share the common vision of improving clients’ financial lives through state-of-the-art digital access, innovation, access to credit and strong risk management.
“The investment will allow BofA to expand its participation in the rapidly growing Indian market ... while doing so with a partner that has local expertise,” the companies said in a statement.
